Over 2.5 million foreigners live in Korea, and out of the 2,399 tips we have received over the past eight years, only 44 companies represent foreigners.
American A, who launched an AI (AI) application in Seoul in 2019, closed the business after less than two years of operation. “I applied to receive government subsidies and I've been struggling again and again,” A said. “I think South Korea is an attractive country for foreign entrepreneurs, but I hope to expand government support for foreign entrepreneurs.”
B (32) is an Indian who has lived in Seoul for 12 years after graduating from a Korean university and participated in the childcare program at Seoul Global Startup Centre in Yongsang, Seoul in 2017. At the time, B tried to obtain a startup visa, D-8-4, but was unable to obtain it due to lack of guidance on issuing the visa and was unable to obtain it until last June. He said, “I asked the person in charge of the childcare program to guide me about business ideas, but I was extremely unhappy to receive the response “Don't waste your time and return to my home country.”
At the time when the number of foreigners staying in South Korea exceeds 2.5 million, the number of foreigners preparing to start businesses is increasing, but it has been confirmed that few foreign companies have received government subsidies. In response, the site noted that it is difficult to properly start a business because government support procedures or guidance from foreign startups are not being run efficiently.
According to the venture investment information platform The VC, only 44 of the 2,399 startups that received tip support from 2016 to last year were represented by foreigners (including Koreans and co-representatives).
TIPS is a technology startup support program launched in 2013 by the Ministry of SMEs and Startups. Selected companies will receive up to 1 billion won over a maximum of three years, including up to 500 million won in government subsidies and private investment. Startups established by foreigners can also receive support, but less than 2% of all foreign companies benefit from it.
“The government is actively implementing policies to encourage foreign startups, but so far, not many foreigners have started their own businesses in Korea,” said Telephone Sung, CEO of TIPS operator CNT Tech.
The atmosphere in the startup industry is that there is still a lack of environment for foreigners to start their own business in Korea. A British resident in South Korea preparing to launch information and communications services said, “I sometimes walk in vain because foreign support centres can misinform the type of visa, and many times the centre staff can't speak English.
The Ministry of SMEs and startups have implemented policies to revive foreign startups. The Global Startup Centre, which opened in Gangnamugh, Seoul last August, was established with the aim of removing barriers foreign entrepreneurs can experience in Korea.
However, the number of users is slow. The 520 users in August last year peaked at 1,108 in November of the same year, then fell to 450 a month later in December.
Time issues, costs and procedures have also been pointed out in relation to the startup visa. According to the Department of Justice, the number of foreigners staying in countries with D-8 visas increased to 5,499 in 2020, 5,887 in 2021, 6,764 in 2022 and 8,250 in October last year, but it's not important to consider the number of foreigners staying in the country.
In particular, among D-8 visas, the number of people staying on D-8-4 visas related to technology startups is very small, with 72 in 2020, 98 in 2021, 110 in 2022, 127 in 2023 and 171 last year.
Silicon Valley in the US issues launch visas by focusing on innovation and business feasibility rather than business performance. However, things are different in Korea. It takes about two months to obtain a D-8-4 visa, including the company's establishment period and visa examination period. Additionally, it must be updated every two years, and once it is updated, it must prove its business performance.
“In developed countries overseas, getting a startup visa is much easier and more convenient than in Korea. However, in Korea, foreigners don't know the type of visa, so it's complicated when receiving a visa,” said Ahn Jun-Mo, an administrative professor at Korea University.
Professor Anne adds, “While the Korean population has declined due to the low birth rate and the economy is losing its vitality, foreign startups will certainly help stimulate the domestic economy,” adding, “the government should be able to make it easier to support foreign companies, as it can be expected to have the effect of increasing jobs for young people in Korea.”
